When a Heatstone and a Lightstone are held together, the Heatstone will give off greater heat, due to energy transfer from the Lighstone. If the crystals are powdered, however, then there is a much greater surface area for energy transfer, so more energy is transferred, much more quickly. This causes rapid expansion and ignition of the surrounding air: an explosion. This is known as the photothermic effect.
In Photothermic Powder, the crystal grains are coated in soot, which prevents the energy transfer. However, if the grains are compressed (by an impact, for example), then the soot is ground off to reveal the surfaces of the grains, which then cause an explosion. The same will happen if the grains come into contact with a naked flame.